- Poised for ongoing annual revenue growth, margin expansion
and significant cash flow generation
- Board authorizes $300 million
share repurchase program
NEW
YORK, Nov. 21, 2024 /PRNewswire/ -- Kyndryl
Holdings, Inc. (NYSE: KD), the world's largest IT infrastructure
services provider, today hosted its 2024 Investor Day. At the
event, senior management outlined the Company's growth strategy,
multi-year outlook and capital allocation priorities, including
initiating a $300 million share
repurchase program.
"Since becoming an independent company in November 2021, we've consistently communicated
our strategic milestones and executed ahead of plan – positioning
Kyndryl for revenue growth, further margin expansion and
strong free cash flow generation," said Kyndryl Chairman and Chief
Executive Officer Martin
Schroeter.
"The investments we've made in our people, technology alliances
and intellectual property have expanded our leadership position in
our industry and our role as the trusted partner of choice in the
markets we serve. The strength of our strategic and
operational execution has allowed us to now have the flexibility to
return capital to shareholders under our share buyback
program."
At the Investor Day, Kyndryl outlined its multi-year growth
strategy, emphasizing that:
- The Company expects to triple its adjusted free
cash flow in fiscal year 2028 compared to fiscal year 2025, and to
more than double its adjusted pretax income over that time
period
- Kyndryl is well-positioned to deliver the single-digit
revenue growth required to achieve its cash flow and earnings
targets
- Kyndryl will realize incremental benefits from its 3A's
initiatives – Alliances, Advanced Delivery and Accounts – which
have been a key source of the margin expansion the Company has
already delivered
- Kyndryl Consult, the Company's advisory services activities,
will continue to grow revenue at a double-digit rate, outpacing
market growth and contributing to margin expansion
- The Company's AI-powered operating platform, Kyndryl Bridge, is
driving efficiencies in service delivery and providing operational
insights that are a powerful source of market differentiation and
revenue generation
Kyndryl reaffirmed its fiscal 2025 guidance, previously shared
on November 7 when the Company
reported second quarter fiscal 2025 results. Additionally,
the Company provided its financial objectives for fiscal year 2028
(the twelve months from April 2027 to
March 2028), including:
- Adjusted free cash flow of at least $1
billion, triple the Company's expected fiscal 2025 amount,
with roughly 100% conversion of adjusted pretax income less cash
taxes into adjusted free cash flow
- Adjusted pretax income of at least $1.2
billion, more than doubling versus fiscal 2025
- Adjusted EBITDA margin of 20% to 22%, up 370 to 570 basis
points versus fiscal 2025
"We've delivered strong signings growth over the last twelve
months, and we expect this momentum to continue as there are
growing needs for the essential services Kyndryl provides.
Our growth in signings supports our future revenue and earnings
trajectory and, in turn, will drive significant free cash flow
generation," said Kyndryl Chief Financial Officer David Wyshner. "Our newly authorized share
repurchase program is an important step in the evolution of our
capital allocation strategy and reflects our commitment to building
long-term shareholder value."
Investor Day Webcast Replay
Slides from today's presentation and a replay of the event are
available at investors.kyndryl.com.
About Kyndryl
Kyndryl (NYSE: KD) is the world's largest IT infrastructure
services provider, serving thousands of enterprise customers in
more than 60 countries. The Company designs, builds, manages
and modernizes the complex, mission-critical information systems
that the world depends on every day. For more information, visit
www.kyndryl.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact
included in this press release, including statements concerning the
Company's plans, objectives, goals, beliefs, business strategies,
future events, business condition, results of operations, financial
position, business outlook and business trends and other
non-historical statements, including without limitation the outlook
and financial objectives in this press release (which does not
assume any future acquisitions or divestitures), are
forward-looking statements. Such forward-looking statements
often contain words such as "aim," "anticipate," "believe,"
"contemplate," "could," "estimate," "expect," "forecast," "intend,"
"may," "objective," "opportunity," "plan," "poised," "position,"
"predict," "project," "should," "seek," "target," "will," "would"
and other similar words or expressions or the negative thereof or
other variations thereon. Forward-looking statements are
based on the Company's current assumptions and beliefs regarding
future business and financial performance.
The Company's actual business, financial condition or results of
operations may differ materially from those suggested by
forward-looking statements as a result of risks and uncertainties
which include, among others: failure to attract new customers,
retain existing customers or sell additional services to customers;
failure to meet growth and productivity objectives; competition;
impacts of relationships with critical suppliers and partners;
failure to address and adapt to technological developments and
trends; inability to attract and retain key personnel and other
skilled employees; impact of economic, political, public health and
other conditions; damage to the Company's reputation; inability to
accurately estimate the cost of services and the timeline for
completion of contracts; service delivery issues; the Company's
ability to successfully manage acquisitions and dispositions,
including integration challenges, failure to achieve objectives,
the assumption of liabilities and higher debt levels; the impact of
our business with government customers; failure of the Company's
intellectual property rights to prevent competitive offerings and
the failure of the Company to obtain, retain and extend necessary
licenses; the impairment of our goodwill or long-lived assets;
risks relating to cybersecurity, data governance and privacy; risks
relating to non-compliance with legal and regulatory requirements;
adverse effects from tax matters and environmental matters; legal
proceedings and investigatory risks; the impact of changes in
market liquidity conditions and customer credit risk on
receivables; the Company's pension plans; the impact of currency
fluctuations; risks related to the Company's spin-off; and risks
related to the Company's common stock and the securities
market.
Additional risks and uncertainties include, among others, those
risks and uncertainties described in the "Risk Factors" section of
the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2024, and may be further
updated from time to time in the Company's subsequent filings with
the Securities and Exchange Commission. Any forward-looking
statement in this press release speaks only as of the date on which
it is made. Except as required by law, the Company assumes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Non-GAAP Financial Measures
In an effort to provide investors with additional information
regarding its outlook, the Company has provided certain metrics
that are not calculated based on generally accepted accounting
principles (GAAP), such as constant-currency results, adjusted
EBITDA margin, adjusted pretax income and adjusted free cash
flow. For more information about these non-GAAP financial
measures, see the Company's Investor Day slide presentation
available at investors.kyndryl.com. A reconciliation of
forward-looking non-GAAP financial information is not included in
this release because the Company is unable to predict with
reasonable certainty some individual components of such
reconciliation without unreasonable effort. These items are
uncertain, depend on various factors and could have a material
impact on future results computed in accordance with GAAP.
All projections are based on recent exchange rates as of
October 2024.
Investor Contact:
investors@kyndryl.com
Media Contact:
press@kyndryl.com
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SOURCE Kyndryl